CFA vs MBA

For those pursuing a career in finance, there is some controversy as to whether one should take the Chartered Financial Analyst (CFA) program or go through a Master of Business Administration (MBA) program. Both have their advantages, so if you’re deciding on which one to choose, you need to determine whether the CFA or MBA will best meet your goals.

The CFA program requires a bachelor’s degree, four years of full-time work experience, completion of the curriculum, and a passing score on three levels of exams. Registration into the CFA program costs about $400, with each exam costing anywhere from $700 to $955. The exam passing rate ranges from 38-46%. The CFA program typically takes three years to complete.

The CFA curriculum is based on three levels of study. Level I studies portfolio management, financial reporting and analysis, and asset valuation. Level II focuses on tools for asset valuation, such as quantitative methods and economics. Level III emphasizes models for asset valuation, in terms of managing investments, fixed income and equity.

An MBA, on the other hand, is broader in focus and attracts students looking to pursue careers in various fields of business. An MBA can be obtained in dozens of fields, but the most common ones include business, finance, operations, entrepreneurial management, human resources and marketing. Many schools even allow students to customize their own MBA program based on their interests and career goals.

Most MBA programs require several years of work experience, essays, Graduate Management Admission Test (GMAT) scores, transcripts and letters of recommendation as part of the admission process. An MBA can take 1 to 2 years to complete, depending on the school, type of program and whether you attend full-time or part-time. Many schools even offer online accelerated programs.

Whether you should pursue an MBA or the CFA depends on what type of career you plan to pursue. A CFA is typically most useful if you plan to pursue a career in portfolio management, equity research or hedge funds. A CFA won’t be as useful if your career goals lie in other fields, however it can also serve as a strong signal of financial competence in related fields. You can also study for the exams while working full-time. If you plan to pursue a career in other types of finance, it does not hurt to get a CFA, but it is a large time commitment. Most students spend close to 1,000 hours studying for exams. Unlike an MBA program, with a CFA you may not have as much access to a large school networks or as many recruiters.

Being part of a top MBA program gives you access to recruiters at top firms. You also have ample opportunity to expand your network and start a career in a new field. With an MBA, you can work at almost any company and in any field. On the downside, MBAs can be very expensive (expect to pay $100,000 or more at top universities for a two-year full-time program). MBA programs can also be intense and difficult to balance while working. You may have to take time off work to fully engage yourself in the program.

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